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Sarbanes-Oxley News & Developments
Latest Option-to-Option Flap: Dump OptionsCorporate response to the debate on expensing of stock-options appear to be a preemptive strike.
> > The outcome of the ongoing flap between the Financial Accounting Standards Board (pro-expensing of stock options) and some members of Congress (against the move) is by no means clear. A bill before the House of Representatives would place a three-year moratorium on any change to the current GAAP standards for options accounting (expensing recommended, not required). Members of FASB, which appears close to recommending companies expense options, have expressed concern about the House bill.
To date, about 280 companies have opted to expense options, or plan to do so. At least two major companies seem primed to circumvent the expensing debate. In the latest instance, finance chief Manfred Gentz, told a German newspaper that DaimlerChrysler was mulling alternatives to options for executive compensation. The DaimlerChrysler report followed the announcement from Microsoft that they would phase out its long-held practice of awarding stock options to employees. Microsoft plans to offer workers direct stock grants that would be expensed. The stock grants would vest over time, in this case a five-year period.
Source: CFO article
Published:2003-07-16
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